Building credit in college might not be at the top of your to-do list, but it’s one of the most important financial moves you can make for your future. Whether it’s renting your first apartment, buying a car, or even landing your dream job, having a solid credit history can open doors. The best part? You can establish good credit without overspending or going into debt. Here’s how:
Understand the Basics of Credit
Before diving in, it’s essential to understand how credit works. Your credit score is a three-digit number that tells lenders how reliable you are with money. It’s determined by factors like your payment history, the amount you owe, the length of your credit history, and the types of credit you use. The higher your score, the better your financial standing.
Start With the Farmers Bank & Trust Foundation Credit Card
The Foundation Credit Card is designed for people with little to no credit history, making it a great starting point to help build and establish credit with a manageable limit and low payment options.
To be successful, be sure to:
- Use your card for small, manageable purchases like gas or groceries.
- Pay off your balance in full every month to avoid interest charges.
- Keep your credit utilization (the amount of credit you use compared to your limit) below 30%.
Pay Your Bills on Time
Your payment history accounts for 35% of your credit score, making it the most significant factor. Even one late payment can negatively impact your score. Set reminders or automate payments for your credit card, utilities, or phone bill to ensure you never miss a due date.
Become an Authorized User
If you have a trusted family member with good credit, ask if they’ll add you as an authorized user on their credit card. You’ll benefit from their positive credit history without being responsible for payments. This can give your credit score a nice boost while you’re still learning the ropes.
Avoid Common Pitfalls
It’s easy to fall into traps that can hurt your credit while you’re in college. Here are a few to watch out for:
- Overcharging on your credit card: Stick to small purchases that you can pay off monthly.
- Opening too many accounts: Limit yourself to one or two credit accounts to avoid damaging your score.
- Ignoring your credit report: Check your report regularly for errors or signs of identity theft.
Use Your Bank’s Tools
At Farmers, we offer free credit monitoring with SavvyMoney Credit Score to help you track your score and understand the factors affecting it, anywhere, anytime via Online Banking and our Mobile App. Take advantage of these resources to stay informed and make smarter financial decisions.
Celebrate Your Progress
Building credit takes time, but every small step you take brings you closer to financial independence. Celebrate milestones like paying off your first statement balance or seeing your score improve. These achievements are proof that you’re setting yourself up for long-term success.
Final Thoughts
Building credit in college doesn’t require a big paycheck or risky financial moves. By starting small, staying consistent, and using the bank’s resources, you’ll set the stage for a bright financial future. Remember, good credit isn’t just about numbers—it’s about creating opportunities for yourself down the road.
When the time is right and with a history of responsible credit use and timely payments, you could be considered for the Farmers Bank & Trust Personal Credit Card and receive a lower APR and Rewards. *Ability to promote to the Farmers Bank & Trust Personal Credit Card within 1 year. Must have six or more valid transactions and no delinquencies.
Ready to take the first step? Your future self will thank you!
